Check Before Filing Your ITR: Do You Fall Under the ‘No Tax’ Category?

Kokila Chokkanathan
Before filing your Income Tax Return (ITR), it’s important to understand whether your income actually falls under the “no tax liability” bracket. Many people overpay or unnecessarily file complex returns without checking if they qualify for zero tax under exemptions and rebates.

Here’s a simple breakdown to help you check.

What Does “No Tax” Mean?

“No tax” does NOT always mean zero income. It usually means:

👉 Your total tax payable becomes zero after deductions, rebates, and exemptions

This can happen under both:

  • Old Tax Regime
  • New Tax Regime
1. Income Limits Under New Tax Regime (2026)

Under the new tax regime, individuals may pay zero tax if income is within certain limits using rebate benefits.

Basic structure:

  • Up to ₹3 lakh: No tax
  • ₹3–6 lakh: 5% slab (but rebate may reduce tax to zero)
  • ₹7 lakh (approx): Full rebate under Section 87A (for eligible individuals)
👉 So effectively:
If your taxable income is around ₹7 lakh or less, you may pay zero tax due to rebate.

2. Income Limits Under Old Tax Regime

Under the old regime, “no tax” is possible if:

  • Total income after deductions (80C, 80D, HRA, etc.) is within exemption limit
Basic exemption limit:

  • ₹2.5 lakh (below 60 years)
  • ₹3 lakh (senior citizens)
  • ₹5 lakh (super senior citizens, in some cases)
Plus:

  • Rebate under Section 87A (for income up to ₹5 lakh after deductions)
3. Who May Fall Under “No Tax” Category?

You may pay zero tax if you are:

✔ Salaried individuals with deductions

  • 80C investments (PPF, ELSS, LIC, etc.)
  • HRA claims
  • Standard deduction
✔ Low-income earners

  • Total annual income below exemption limit
  • Part-time or gig workers with limited earnings
✔ Investors with exemptions

  • Long-term savings and tax deductions
  • Insurance and housing loan benefits
4. Common Mistake people Make

Many taxpayers:
❌ Ignore deductions
❌ Don’t apply rebate under Section 87A
❌ Choose wrong tax regime
❌ File ITR even when tax is zero (still sometimes necessary)

5. Do You Still Need to File ITR If Tax Is Zero?

Yes, in many cases:

You may still need to file if:

  • Income exceeds basic exemption but tax becomes zero after rebates
  • You want to claim refunds (TDS deducted)
  • You have bank interest or investments above threshold
  • You need financial proof (loan, visa, etc.)
6. Quick Example

Case 1: Salaried Person

  • Salary: ₹6.5 lakh
  • 80C deduction: ₹1.5 lakh
  • Taxable income: ₹5 lakh
  • Result: Zero tax under rebate
Case 2: New Regime User

  • Income: ₹6.8 lakh
  • Rebate under 87A applied
  • Result: No tax payable
Final Takeaway

Before filing your ITR, always check:

👉 Your total income
👉 Applicable deductions
👉 Which tax regime is better
👉 Eligibility for rebate under Section 87A

In many cases, individuals earning up to around ₹5–7 lakh annually may end up paying zero tax, depending on deductions and regime choice.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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